Hitting your targets without reaching your goals is bad business

I went to a convenience care clinic yesterday. My regular doctor was on vacation and I thought that I might have strep throat.

As I sat in the examining room something struck me. It was the word “EXCELLENT”. It was everywhere. One sign read:

EXCELLENT SERVICE
Our goal is to provide you with EXCELLENT service.
Please let us know what we can do to make your visit EXCELLENT.

A second sign, from the charge nurse, also reinforced that they were striving for EXCELLENT service and that if I didn’t receive EXCELLENT service I should contact him or her.

Normally this would have just struck me as odd. However, having worked in healthcare, I had a suspicion as to what was happening.

It turns out this is a trick that is used to increase customer satisfaction scores. Patients, customers, or anyone else, when given the opportunity to rate you on a survey, will mirror the language that they heard during the interaction.

My guess is that in a few weeks I’ll receive a customer service survey. The highest rating on the survey is probably “EXCELLENT”. In the hospital that I worked, the key words were “VERY GOOD”. Our nurse managers were taught to say “Very Good” repeatedly when talking to our patients. Even our elevator wished you a “Very Good” day when you exited in the lobby. The consultants who worked with us at the hospital assured us that our scores would go up if we would consistently use that phrase. To a certain degree, they were right.

Here’s the problem. Our service wasn’t changing (in a meaningful way). If two people have identical experiences but one rates the experience higher because of this subliminal scripting, was that experience really better? Some may argue that it was since satisfaction is about perception. Whether it is or not, I think this strategy misses the mark. While changing perceptions is important, the goal of measuring satisfaction is to ensure that your people, processes, and systems create a good experience for your customer. This is a case where people lost sight of the metric as a proxy for a goal. They began to make decisions and take actions for the sake of the metric rather than the goal. Instead of teaching people how to create a better patient experience, we were teaching them how to get the patient to mark a different number.

The real question we should have asked was whether we believed that our current service was adequate. If we thought our service was good, why were we spending any time trying to get our patients to give us a higher score? We should have just set the target accordingly. Conversely, ff we felt that our service was inadequate, why focus on changing perception rather than the actual service? Keeping the service the same while focusing on improving perception provided little practical value especially to the patient. (Note: there was some value since the patient satisfaction scores are converted to a relative ranking against other hospitals. However, in my opinion, this just creates a situation where there is significant grade inflation as organizations game the system to increase their scores rather than taking real action. Perhaps this explains why healthcare, as an industry, is rated so low against other industries when it comes to customer experience).

This isn’t just true in healthcare. You’ve probably experienced this the last time you went to a car dealer for service. You come to pick up your car and receive a copy of the satisfaction survey that will be mailed to you by the manufacturer. It will inevitably say something like, “If you can’t give us a 5 on all questions, talk to the service manager”.

If it took three days for a repair that should have taken two hours, do you somehow get that time back? If the service agent was rude does the manager someone erase that part of your memory? Of course not. They can’t change the experience which is what the survey is measuring. The best they can do is compensate you for the poor service. That’s ok. Companies should compensate their customers for poor service. If you give them all fives you enable them to hit their target without reaching their goal. Chances are, the next time you come in for service not much will change.

When they ask me what they can do to get all fives, I tell them to fix their service and quality problems, and if they don’t recur, I’ll give them all fives on my next visit. That’s the right way to help them use their survey to improve service. If there is a question on responsiveness to my concerns, I’ll certainly give them a five on the spot. I’m not going to say that the other aspects of the service were good when they weren’t.

Gaming the system happens everywhere. I worked in one organization where managers would wait to fire employees until after their probationary period. This was because there was a metric in place regarding attribution in the first six months. The goal behind that metric was to decrease costs and improve the quality of the recruiting process. It’s expensive to hire and orient employees and losing employees in the first six month is a problem. However, by keeping the employees beyond their probationary period, these mangers were making things worse. Not only did the company continue to bear the cost of poor performers, it also had added costs since it’s harder to fire someone after their probationary period. In addition, by keeping the employees, it masked the original recruiting problem for which the metric was designed to track.

Measures are proxies. Proxies aren’t bad as long as you remember that they aren’t the goal. They are a tool to help you determine whether you are achieving a goal. Playing to the metric without understanding or attending to the real goal will only provide short-term benefit.

Every organization needs a SMART ASK

Are you a Smart Ask? Do you have one in your organization?

A “smart ask” is a person who pushes the organization by asking tough and insightful questions. The Smart Asks helps you find holes in your thinking or challenges your deeply held assumptions.

Smart Asks are a valuable asset for an organization. Yet, they are often shunned or avoided. They make things harder. They don’t always appear to play well with others. They don’t give you the confidence of having unanimous votes for all of your ideas. But, they do keep you honest.

Asking questions is easy. Asking good questions is a skill. The Smart Ask knows how and when to ask just the right question. The smart ask usually doesn’t ask about facts – anyone can ask about those (and they don’t provide a lot of value). Smart Asks focus on meaning and purpose. They ask for the implication of the facts. They ask whether the facts matter. They ask whether the facts are even reasonable in the first place. That’s the role of a good Smart Ask.

While Smart Asks are hard to find, their nemesis, the Ask Hole is easy to find. Ask Holes are the people who use questions to shoot down ideas or silence people. Their questions are really statements with a question mark at the end. The Ask Hole focuses on facts and details at a time when you should be focused on possibility and opportunity. The Ask Hole uses question to embarrass or squelch others. Most importantly, the Ask Hole uses questions to make his or her point rather than to understand yours.

Which one are you? Are you a Smart Ask or an Ask Hole? Which one gets rewarded in your organization?

You might not be the Smart Ask but you’d better be sure you have one. And, under no circumstances should you take on the role of Ask Hole. There are already too many of them cluttering up your organization.

The Question of Leadership has changed its name

The Question of Leadership has a new name. When I first started this blog, I thought my focus would primarily be on answering the question of what leadership is all about. When I look back on many of the entries in this blog and reflect on the leadership work I've done with organizations, I realize that I've had an answer all along. Leadership is about creating meaning. That's the common thread in all of the work I've done. Leaders create meaning by providing context and perspective to that which is happening around them. Thus, the new name for the blog is "Making dollars by making sense."

I think that the idea of meaning is often overlooked or under valued. "Meaning" is one of those squishy words that doesn't seem particularly practical, especially in a business environment. We are taught to act, not necessarily to think.

Yet, I believe that those leaders who take the necessary time to create meaning will be rewarded. There is a widening body of literature on this topic from Daniel Pink's "A Whole New Mind", to books on analytics to books on storytelling in orgnaizations. Meaning is here and it's necessary for organizations and their leaders.

There are four areas in which leaders create meaning:

1. Creating a meaningful contribution to their organization
2. Creating meaningful work for their people
3. Creating meaning from information and data
4. Creating meaning for themselves and the work they do

Nearly every post in this blog ties to one of those four categories. Moving forward, while I'll continue to write on a wide array of topics, I will filter all of them through this lens.

I hope that this blog has helped you make sense of your role as a leader and wish everyone a new year full of meaning, purpose, and impact.

When equal isn’t fair

Do you treat your people equally? Do they want to be treated equally? Conventional wisdom might say they do. But I’m not so sure. I think that people want to be treated fairly and often that means treating them differently.

In “Getting to Yes”, Roger Fisher tells a story that illustrates the difference between equality, fairness, and good solutions. Two people are arguing over an orange. Their solution is to cut the orange in half so each gets an equal piece. He points out that while the solution is equitable it’s not that good. The first person discards the peel and eats the fruit. The second person, discards the fruit and uses the peel for a recipe. They had different needs. The equal solution only met half of their needs whereas giving them different things, one the peel and one the fruit, might been better for both of them.

It works the same with your people. I call this the averaging problem. Think of the numbers 1,2,6,8,9. Their average is 5.2. Averages are a measure of central tendency. That means that the average is the number that is closest to every other number. It also means that the average is unlikely to be any of the numbers in your data set. Treating everyone equally is much like applying an average. The solution is probably equally close (or far) from meeting each person’s needs yet it probably fails to specifically meet any of their needs.

This isn’t just true for decisions about perks or special assignments. It is also true for how you interact with your team.

If you are having the same type of conversations with your high performers that you have with your low performers, something is wrong. Sure they are equal. But high performers need to hear about the future and how to get there. Low performers need to hear about the present and how to continue to be a part of it.

I used to rotate special projects among my team members (in an effort to treat them equally). Then someone pointed out that giving more work to the person who wasn’t able to do her job wasn’t really helping. It certainly wasn’t fair, though it was equal.

Fairness is about consistency but it’s about consistency in your process. As long as you are making an earnest effort to meet each person’s needs and as long as you give each consideration your full time and attention you are being fair. When you do that the end results might be very different for each person. In fact, if you do it right, it should be.

Looking back while moving forward

Lately I’ve been pushing leaders to stop having their teams walk them through their analysis and just start with the conclusion. I’m finding that many people are uncomfortable with this. Leaders don’t want to make decisions based on bad data. Even more, they don’t want to send bad data to their boss. So how do you balance checking the data without slogging through the entire analysis all over again? The answer is to get the data in the context of pushing the conversation forward rather than backward.

Leaders create meaning through their context and perspective. Reviewing data is no different. Suppose you are reviewing recommendations on which regions need help improving sales. Don’t ask your team to provide specific details on how they analyzed the sales data or how each individual region did – that’s just rehashing old work.

Instead ask about the conclusions. Is there a region that you believe (or know) has been steadily improving in the past six quarters? If so, ask if they saw that trend? It’s a simple question but it will continue to drive toward greater understanding and it will “check” their process. If they didn’t look at trend data you’ll find out. If they forgot that region you’ll find out. If they did both, you’ll have saved time by not talking about a process that was done correctly and you’ll move the conversation forward by talking about what the data means.

Another option is to ask questions around what you expected to see. Does the data confirm what you suspected? If so, why did you suspect that? Ask questions that confirm or refute those assumptions. Similarly, if the data doesn’t agree with what you expected, center your questions on those assumptions.

Asking good business questions, based on the context and perspective you have about the organization will more efficiently and more effectively move the conversation forward and check the process. It will also give your people a greater sense of empowerment since you are engaging them in a conversation about the business rather than just checking their work.

Here are a few tips to keep in mind:

1. 
   If you are not confident in an individual’s ability to execute the analysis properly (e.g., do the math correctly, get numbers to foot, etc.) you need a different person (or you need to develop the one you have). It’s not in anyone’s interest for you to redo someone else work in the guise of a review.
2. When the stakes are high and accuracy is critical, build a quality process that ensures that the mechanical parts of the analysis are done correctly. Your value isn’t adding and double-checking numbers. It’s in interpreting them.
3. If you find that you spend more time on the details than on interpreting them, find out why. Are you unsure about the broader business issues? Did you commission an analysis without first thinking through the problem and what you expected to see? We often dive into the details because it’s safer than confronting our knowledge of the big picture.

Are you hitting your targets but missing your goals?

Take a look at your process metrics. Are you using any mean scores? If so, you might be missing performance problems. More importantly, you are reducing your ability to make decisions and take action.

For example, suppose that your help desk has a goal of getting issues resolved within 90 seconds. It resolves resolving half of the issues in 60 seconds and the other half in 120 seconds. This would look if your target (metric) was set at an average of 90 seconds, yet you'd be be missing your goal fifty percent of the time!

That’s the problem with a simple average. By its very nature, it can mask what is really happening. For example, here are three scenarios in which you could have an average time of 90 seconds per call each of which would require a different action:

• Fifty percent of the calls take 30 seconds, and fifty percent take 150 seconds
• Twenty-five percent of the calls take 60 seconds, fifty percent take 90 seconds, and Twenty-five percent take 120 seconds
• All calls take 90 seconds

In the first case, you probably have some significant and broad reengineering work ahead of you. In the second case, you probably have some focused process improvement. In the third case, you are right where you want to be.

The point is that understanding variance is as important, if not more important, than understanding the mean. This is the basis of quality processes such as Six Sigma. There are a lot of good books and articles written on this subject.

But, there is a simple way to get started – switch to using frequencies instead of means. In the example above, your metric might be that 80% of the issues must be resolved in 90 seconds (you would set the percent based on your business model). This way, you can’t be fooled. You can also set a lower bound frequency – less than 5% of all calls should take more than 90 seconds. While the frequencies won’t tell you the cause of the problem, they will give you information that is more actionable.

For example, when reviewing customer satisfaction data, I used to use three frequencies (the data based on satisfaction surveys where 1 was very dissatisfied and 5 was very satisfied):

• Percent of ones and twos (people who weren’t satisfied
• Percent of fours and fives (people who were satisfied)
• Percent of fives (people who were very satisfied)

I’d look at questions or departments that fell outside the bounds on any of them in the following way:

• First focus on areas that were having more ones and twos – usually major changes were necessary
• Then focus on areas that were having fewer fours and fives combined – usually there were a couple of key issues
• Finally, focus on areas that had fewer fives – usually “polishing” some rough edges was all that was needed

Those three simple frequencies allowed me to triage and prioritize my effort on improving satisfaction. (Of course, your prioritization also depends on impact - it could be that moving the fours to fives has a greater impact than moving the ones and twos.)

A classic question from Statistics 101 is, “Would a six foot tall person always be able to walk across a pond whose average depth is 5 feet without drowning?” Of course not and your business can’t either. Hitting a target that’s based on averages might just mean that you are having average performance.

The path of least resistance

I recently purchased a Blackberry Storm. After setting up the essentials (contact list, calendar, etc.), I copied my music. My last phone didn't have an MP3 player built in. I was excited that Iwould no longer have to carry both a phone and MP3 player with me.

I decided that it was only appropriate that I break the MP3 player in with the Boss. So I queued up "Live in Dublin" and waited to hear the opening of "Atlantic City" (BTW: Live in Dublin has some of the best alternative versions that I've heard). Well, I waited, and waited but no song. Then I saw a little message on my screen - "Invalid file format". After some investigation, I found out that file format wasn't the issue. The issue was with the digital rights to the song.

When I bought the album, WalMart.com said that I would have the right to burn it 10 times and synch it unlimited times. Unfortunately, WalMart chose to stop supporting DRM last Feb and no longer updates your licenses when you try to synch. But, this isn't about Walmart. As much as I am disappointed by their decision (and it will impact my decision to shop there), this is a bigger issue. It's about the recording industry.

The recording industry doesn't want me pirating their songs. That's fair. I don't want to pirate their songs either. I believe that artists, producers, and recording companies are providing a product and deserve to be paid. So, we both want the same thing. Yet, they've made it really hard for me to do 1) what they want me to do, 2) what I want to do, and 3) what is right. That's a problem. It's a problem because people tend toward the path of least resistance. As I've researched this in an attempt to find a solution I've discovered something interesting. The only people who have problems are the ones who are buying musically legally. I haven't seen any web or blog postings saying, "Gee, it's such a pain to copy pirated music onto my MP3 player". So where's the incentive to do it legally? For me the incentive is that I believe that pirating is fundamentally wrong so I'm not doing it. I can certainly see how someone else with a similar belief might eventually tire of hitting their head against a wall. I'm willing to meet the recording industry half way on this one, but I wish they would have been willing to do more to help me help them.

While this story is about an industry and its consumers, it's a good lessons for leaders. The recording industry made two mistakes. First, they focused more on the people who weren't "bough in" than those who were. That's a common mistake. The truth is that cheaters will almost always find a way to cheat. Building your systems around them usually just makes it harder for those who want to work within that system. (From what I've been reading, many spam programs seem to have better success at reading graphical captchas* than I do). As a result, the second problem occurs -- it eventually become too hard to do the right thing.

Right now there are people in your organization who want to do exactly what you want them to do. But, there are processes, policies, rewards, and an organizational culture that make it easier for them to do something else. Those people are willing to meet you half way, but you can't put the burden on them to take it all the way. They need your help.

Make doing the right thing the path of least resistance. When you do, you will start getting the results you want.

*captchas are those pesky boxes with the funky, barely intelligible letters inside of them that you sometimes see on web forms. Their purpose is to prevent spam programs from signing up for multiple accounts or sending out spam through blog entries, comments, etc. The problem is that many of these captchas can now be read more (or equally) effectively by computer programs (which are created by spammers) as by people. And the computer program doesn't get frustrated if it take ten tries.

How to really show that you've been working hard

Demonstrating the amount of effort you've put into your work is an interesting challenge in the post-industrial age. In the past, we often had some big (or not so big) thing that we produced. That thing became a symbol of our work effort. It was hard to argue that someone didn’t put in a good day’s work when there was tangible product created at the end. But many of us don’t make “things” anymore. We analyze information, make decisions, or develop strategies. Our product is often presentations or documents. How do you show your effort when your product is more information, or in some cases, a simple answer to a question?

In my analytics workshop, I encourage people to boil findings down to a few salient points that tell a concise yet compelling story. For example, instead of showing a bar graph with ten years of historic sales data moving in an upward trend, you simply state the point of the graph (i.e., “Sales have been steadily increasing”) as part of a broader argument. Yet, while this creates a more concise and efficient story, I get tremendous resistance. The main concern that many people have is that if they boil their work to a few simple points, it won’t show all of the effort they put in. They believe that the graphs, charts, tables, and details demonstrate their hard work.

It’s time that we rethink this. First, we need to break our assumption that the number of slides or words used is a measure of quality or thought. I would even take that one step further and say the opposite is true. The more slides or words you use, the less you understand the big picture. Take Einstein’s famous equation E=MC^2. Einstein’s genius was his ability to reduce such a complex subject to a simple, elegant formula.

Second, we need to stop worrying that a statement is not credible unless it has first been qualified with a mountain of detailed data points. I’m not suggesting that we stop using data to draw conclusions. I am suggesting, however, that we don’t need to rehash the same data over and over again. If you’ve done the analysis once, why take your boss through it again? That’s not efficient. If he or she needs the original data to draw a conclusion then you aren’t really needed in the process.

Third, we should start our conversations with the results and then pull in our thought process or supporting data as needed. Leaders have to get used to this as well. Many of the people I speak with tell me that the main reason they provide so much detail before getting to the point is that their boss requires it. Starting from where the last person left off will move you much further in less time than rehashing old thinking.

It’s time to change our thinking about our work and the value we provide. Bigger isn’t always better, especially when it comes to making a point. If you feel the need to take your boss through your thinking from start to finish then you aren’t doing your job. As a boss, if you need to have your people take you from start to finish, you either have the wrong people or you have the wrong attitude about leading. Either one will slow productivity and the ability to make good decisions and take action.